US Airways Buys Some Time

A bankruptcy court judge has reportedly approved an agreement to extend financing terms.
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US Airways

(UAIRQ)

won a bit of breathing room Thursday, after a federal judge reportedly approved an agreement between the bankrupt airline and its lenders that extends financing until mid-January.

Judge Stephen Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia okayed the deal, which will allow the carrier to keep planes in the air by drawing on the balance of previous loans, most of which are backed by the federal government's Air Transportation Stabilization Board, according to

Reuters

.

The agreement requires US Airways to retain a specific level of cash each week, declining from $750 million at the end of the month to $550 million on Jan. 14, the report said.

US Airways shares gained 2 cents, or 1.8%, to $1.14.

The company's survival is on the line. The airline lacks debtor-in-possession financing, common in bankruptcies, and must use its remaining cash to fund operations with the industry in the seasonally week winter months and staggering from record-high fuel costs.

The airline is hoping to secure wage concessions from its pilots union, which is in the process of voting on a recent wage agreement. It must cut other labor costs, too. The Association of Flight Attendants, which represents 5,500 employees, and the International Association of Machinists, which represents 4,800 employees, have rejected management's last proposal on wage concessions.

The news comes as network carriers ranging from

Continental

(CAL) - Get Report

to American Airlines, a unit of

AMR

(AMR)

, are preparing to roll out what is generally expected to be an ugly set of third-quarter results. The exceptions lie with the lower-cost carriers such as

Southwest Airlines

(LUV) - Get Report

, which earlier Thursday posted a solid third-quarter profit, beating Wall Street's expectations.